Farmers' & Ginners' Cotton Oil Co. v. Baccus

• Decision Date: 10 November 1921
• Docket Number: 6 Div. 494.
• Citation: 207 Ala. 75,92 So. 4
• Parties: FARMERS' & GINNERS' COTTON OIL CO. v. BACCUS.
• Court: Alabama Supreme Court

92 So. 4

207 Ala. 75

FARMERS' & GINNERS' COTTON OIL CO. v. BACCUS.

6 Div. 494.

Supreme Court of Alabama

November 10, 1921

Rehearing Denied Dec. 22, 1921.

Appeal from Circuit Court, Marion County; T. L. Sowell, Judge.

Action by John W. Baccus, against the Farmers' & Ginners' Cotton Oil Company, in assumpsit. Judgment for plaintiff, and defendant appeals. Transferred from Court of Appeals under section 6, Acts 1911, p. 449. Affirmed.

Sayre Somerville, and Gardner, JJ., dissenting.

E. B. &amp K. V. Fite, of Hamilton, for appellant.

W. F Finch, of Jasper, for appellee.

GARDNER J.

Appellee sues appellant on common counts in the circuit court of Marion county. The defendant interposed a plea in abatement to the effect that it was a domestic corporation, having its domicile and place of business in Birmingham, Jefferson county, Ala., and had not done business or was not doing business by agent in Marion county, and was therefore not subject to suit therein. The issues presented by the plea in abatement were submitted to a jury, resulting in a finding in favor of the plaintiff. The refusal of the affirmative charge requested by the defendant upon the issues presented by these special pleas constitute the first question presented for consideration.

The evidence consisted of two witnesses called by the defendant. One Perry, who resided in Marion county, testified that in the fall of 1919 he purchased cotton seed as a broker for the defendant; that what he purchased was by carload lots, and that he had no authority to buy any seed for defendant without confirmation thereof from the home office in Birmingham. He was paid by defendant $1 per ton as commission, the seller being paid direct by checks mailed from the defendant's office in Birmingham; the seed being shipped by the seller to the defendant's home office. The defendant had no office in Marion county. The witness had purchased seed for the defendant during several seasons under similar arrangements. The seed purchased by the witness for the defendant was at the price obtained at the time from the latter's home office; all sales being subject to confirmation in Birmingham. The next witness, one Kidd, was assistant manager of the defendant company at the time of the sale here in controversy. He stated that the main office of the defendant was in Birmingham, and that there was no office elsewhere in the state; that the agreement was with Mr Perry; that whenever he could locate any cotton seed and could turn them to the defendant he would be paid so much per ton as commission; all purchases being subject to confirmation at the office in Birmingham. Some of the evidence of this witness further tended to show that after Perry had obtained the price from the defendant's office at Birmingham he had authority to purchase the seed. The defendant company also bought seed direct. It was without dispute that the defendant was engaged in crushing the seed and making products from them, with headquarters and manufacturing plant located in Birmingham. In speaking of the business of the defendant corporation the witness Kidd said:

"It was engaged in the manufacture of cotton seed products. They had a plant in connection with the operation of cotton seed crushers, and an office, etc. They made cotton seed oil. They made other products besides cotton seed oil, meal, lint, hulls and fiber. Their main office was in Birmingham, Jefferson county, Ala., during that time. All of their plants which were engaged in the making of cotton seed products-production of oil and other products-were in Birmingham, Jefferson county."

Section 6112 of the Code of 1907, as amended by Acts of 1919, p. 240, reads as follows:

"A foreign or domestic corporation may be sued in any county in which it does business by agent, or was doing business by agent at the time the cause of action arose; but all actions for personal injuries must be brought in the county where the injury occurred, or in the county where the plaintiff resides, if such corporation does business by agent in the county of plaintiff's residence."

There is much argument devoted to the proposition that witness Perry was but a broker, and not an agent of the defendant within the meaning of the foregoing statutory provision, and that the case in this respect falls under the decision of International Cotton Seed Oil Co. v. Wheelock, 124 Ala. 367, 27 So. 517. The view which we take of the case renders a consideration of that argument unnecessary.

The foregoing statute received much discussion in Sullivan v. Sullivan Timber Co., 103 Ala. 371, 15 So. 941, 25 L. R. A. 543, with particular reference to the words "does business by agent." It was there held that the mere presence of an agent within the state or particular county, with authority to transact some particular business not involving the exercise of corporate powers and franchises, and not part of the business the corporation was created to transact, was not within the foregoing statute. The Sullivan Case gave full approval to the holding of this court in Beard v. Union & Am. Pub. Co., 71 Ala. 60, quoting therefrom the following language:

"There must be a doing of some of the works, or an exercise of some of the functions, for which the corporation was created, to bring the case within that clause" [referring to the first clause and fourth section].

In the Sullivan Case it was held that the railroad and machinery situated in Conecuh were mere adjuncts or appurtenances to the sawmill which had been operated in the county of Escambia, and the mere location of an agent in the former county for the proper care and protection of this property was not in the exercise of corporate powers for the transaction of the business for which the corporation was created and organized within the meaning of the statute. In the Beard Case, supra, it was held that the company, having an agent in the state to receive and collect subscriptions for a newspaper it was publishing in another state, was not "doing business" within the meaning of the Constitution. In International Cotton Seed Oil Co. v. Wheelock, supra, it was said:

"Not every act done within the corporate powers will constitute the business meant by the statute."

In applying the test laid down in the Beard Case, supra, the court said:

"It may not always be easy to distinguish between acts done in the exercise of corporate functions and those done merely within corporate powers."

This distinction was also recognized in Holman v. Durham Buggy Co., 200 Ala. 556, 76 So. 914. In Abraham Bros. v. Southern Ry., 149 Ala. 547, 42 So. 837, it was pointed out that the words "does business," as used in the constitutional provision and the statute, must have the same meaning. In that case the Southern Railway was sued in Montgomery county, but it had no line of railroad in that county, and did no business therein other than to have located in the city of Montgomery two soliciting agents, one a freight agent to solicit shipments of freight in that territory for the defendant railroad, and the other a traveling passenger agent to solicit passenger traffic; neither agents being authorized to enter into contracts to bind the company or receive money for the company. The court said:

"Upon the principles declared in Beard v. Union & American Publishing Co., 71 Ala. 60, we feel constrained to hold that the act of the defendant in constituting agents, with no power or authority to bind it, but simply to solicit traffic for it, was not 'doing business,' within the constitutional or statutory provisions."

In connection with these authorities might also be cited 19 Cyc. 1272, 1280; 2 Beach on Private Corporations, § 416; Advance Lbr. Co. v. Moore, 126 Tenn. 313, 148 S.W. 212; John Deere Plow Co. v. Wyland, 69 Kan. 255, 76 P. 863, 2 Ann. Cas. 304, and note.

The purchase of cotton seed by the defendant corporation was of course within its corporate powers, but it was an adjunct, or merely a necessary incident to its business, and not in the exercise of functions for which the corporation was created. It was incorporated for the purpose of manufacturing cotton seed into oil and other products for the...